________ provides protection to employees' beneficiaries only ...

[bucstennis@aim.com]

________ provides protection to employees' beneficiaries only during a limited period.
 
  A) Term life insurance
  B) Universal life insurance
  C) Whole life insurance
  D) Social Security survivor's insurance

Question 2

Discuss the basis for distinguishing between qualified plans and nonqualified plans. Be sure to provide definitions of each.
 
  What will be an ideal response?

[Dominic]

Answer to Question 1

Answer: A

Answer to Question 2

Answer: Tax incentives encourage companies to offer pension programs. Some of the Employee Retirement Income Security Act (ERISA) of 1974 provisions set the minimum standards required to qualify pension plans for favorable tax treatment. Failure to meet any of the minimum standard provisions disqualifies pension plans for favorable tax treatment. Pension plans that meet these minimum standards are known as qualified plans. Nonqualified plans refer to pension plans that do not meet at least one of the minimum standard provisions; typically, highly paid employees benefit from participation in nonqualified plans. The current tax treatment of qualified plans continues to provide incentives both for employers to establish plans and for employees to participate in them. In general, a contribution to a qualified plan is deductible in computing the employer's or employee's taxes based on who made the contribution. Employees pay taxes only on the amount they withdraw from the plan each year.

[bucstennis@aim.com]

Thank you

[Dominic]

No problemo